New Privatization Wave Aims To Offset Deficit

TIRANA, June 17 – Albania will start a new wave of privatizations that will help to offset the budget deficit, Economy Minister Dritan Prifti said this week.
Prifti said the sale of insurer INSIG and the remaining state-owned shares of Albtelecom and OSSH would allow the government to collect between 100 and 150 million euros.
“The next two years, 2010 and 2011, will be years of the major privatizations,” Prifti said. “We have chosen privatization as a reform strategy to diminish public property, especially when it is not efficient.”
Other public assets to be privatized include large enterprises like Albpetrol and a lot of real estate currently managed by the several government bodies, including the Defense Ministry.
Speaking in a lengthy television interview on the private News24 channel, Prifti also gave details on the impact of political crisis in Albania’s economy and other pressing issues for business, such as VAT refunds.
“The political crisis has had effects on the Albanian economy, especially the hunger strike period and the bad image that this strike gave the world, especially in Europe, through the media,” he said. “It made foreign investors fearful of investing in Albania.”
These new investments are needed particularly when Albania is looking to sell thousands of state-owned properties to the highest bidder.
According to Prifti, there will be a special Web site set for privatization, which will display every asset that comes up for privatization, the value, with pictures and dimensions.
“So there will be an extraordinary transparency, as it will make the television spots, through which will attract the attention of local and foreign companies to be involved in this privatization process,” he added. “The greater the transparency is, the lower is corruption in the process and so the higher is the value that the state can benefit from privatization.”
And the befits to the state coffers will be large..
“In a preliminary account that we have made, I think at the end of 2011 we would have collected in the state budget more than 100 million euros. My opinion is that it will be about 100 to 150 million euros.”
However, Prifti admits that despite predictions, expectations are realistic and objective, given that the region is experiencing a financial crisis which has not ended yet and considering new rules that the banking system is using to tighten credit.
In a few cases, valuable assets will require the involvement of foreign companies, such as for giants like Albpetrol, INSIG or OSSH. In other cases the assets will be sold to Albanian businesses.
“I hope they can benefit Albanian companies,” Prifti said.